Gabriel Barbier-Mueller’s Harwood International sold off another office building, amid a wave of sales and foreclosures at the firm’s signature Uptown district.
Harwood offloaded Harwood No. 3 to San Francisco-based private equity firm TPG on Dec. 1, deed records show. It’s the fifth property Harwood sold to TPG in the last six months.
Harwood No. 3, at 2727 North Harwood Street, was built in 1999. It’s anchored by law firm Jones Day, which occupies 133,000 square feet of the 210,000-square-foot office building. Jones Day was supposed to anchor the upcoming Harwood No. 15, with plans to move into a 73,000-square-foot block, but pulled out of the project late last year.
After tapping Newmark to hunt for a recapitalization partner, Harwood sold four buildings to TPG last fall: Harwood No. 2, at 2728 North Harwood Street; Harwood No. 6 (also known as Saint Ann Court), at 2501 North Harwood Street; Harwood No. 7 (also known as Frost Tower), at 2950 North Harwood Street; and Harwood No. 10, at 2850 North Harwood Street.
The sales to TPG coincide with a spate of foreclosures in the district that resulted in Harwood losing two office buildings.
Harwood handed back the keys to Harwood No. 4 in April and lost Harwood No. 1 in November. San Francisco-based Spear Street Capital took back Harwood No. 4, at 2828 North Harwood Street, in a $73 million credit bid. First United Bank seized Harwood’s first development, at 2651 North Harwood Street, with a $27 million credit bid. Bill Cawley’s Cawley Partners bought the property on Dec. 30.
Harwood nearly lost Harwood No.6 to foreclosure in January, but saved the building, known as Saint Ann Court, with a recapitalization deal.
The financial unraveling of Harwood is at odds with the health of the office market in Uptown. Though Dallas-Fort Worth continues to struggle with high vacancy rates, Uptown has been a reliable outlier. With a high concentration of trophy office properties, the sought-after submarket accounts for nearly half of the region’s office pipeline. Consequently, it also boasts the highest rents of any submarket in Dallas-Fort Worth, with an overall average gross rent of $62.21 per square foot, according to a recent report from Partners Real Estate.
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